Mexico ends anti-dumping duties on U.S. beef.... but why?

August 11, 2010
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by Bryan Salvage

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CENTENNIAL, Colo. – Mexico’s Ministry of the Economy announced it has eliminated anti-dumping duties that have been imposed on imports of U.S. beef for the past 10 years. The Ministry's resolution, which goes into effect Aug. 11, eliminates the duties effective April 29. Starting on Aug. 11, U.S. beef arriving at Mexico's border should enter the market duty-free. Companies that have paid duties since April 29 are entitled to a refund of all duties paid, according to the National Cattlemen’s Beef Association (N.C.B.A.).

For many years, the U.S. beef industry has been seeking resolution of this issue. With full support from the U.S. Department of Agriculture (U.S.D.A.), N.C.B.A. and the U.S. Meat Export Federation (U.S.M.E.F.) have led a coalition of U.S. beef industry interests seeking elimination of the duties, which ranged from 3 cents to 29 cents per lb. The duties applied to about half of U.S. beef production, which kept some U.S. companies away from Mexico's market.

“For nearly 10 years, U.S. beef producers via N.C.B.A. and U.S.M.E.F. have spent an enormous amount of time, money and effort to resolve this issue with Mexico,” said Steve Foglesong, N.C.B.A. president and Illinois cattle producer. “Today’s news is a big win for all segments of the beef industry because throughout these 10 years many exporters, small and large, were locked out of our top export market due to these prohibitive duties.”

"This is a very important development for those who advocate free trade, as this decision very much upholds the spirit and intent of N.A.F.T.A.," said U.S.M.E.F. Chairman Jim Peterson, a rancher from Buffalo, Mont. "It's been a long time coming, and is a direct result of the cooperative effort of several beef industry interests. I want to particularly thank N.C.B.A. for its policy work on this issue and the strong relationship it has developed with all sectors of Mexico's beef industry, which really paid big dividends in this case."

Although Mexico is still the leading destination for U.S. beef exports, it is the only major market that is trailing last year's results, Peterson noted. The U.S. Trade Representative’s National Trade Estimate Report on Foreign Trade Barriers has estimated these duties have caused losses of $100 million to $500 million annually because of reduced shipments and altered trade flows. Peterson is confident that elimination of the duties will help the market's performance.

"This levels the playing field for all U.S. products entering Mexico and should certainly help us regain momentum in our No. 1 export market," he said.

The anti-dumping duties are scheduled to sunset every five years, but could have been continued this year upon a request for review by an interested party. Such a request was filed by the association of Mexican cattle producers (Confederación Nacional de Ganaderos, or C.N.O.G.), but the organization later withdrew it.

MEATPOULTRY.com attempted to find out from U.S. sources why Mexico made this “about face” after 10 years. Was something given to Mexico by the U.S. to cause this change of heart? “The duties expire if there is no formal request to continue them,” a U.S.M.E.F. spokesperson told MEATPOULTRY.com. “Since C.N.O.G. withdrew its request, the ministry's decision was essentially made.”

The American Meat Institute (A.M.I.) explained in a news release the duties were put in place for certain U.S. packers amid dumping allegations raised by Mexican livestock producers. The U.S. became a net cattle and beef exporter to Mexico in 1996 and today represents a $910 million beef export market.

“You should ask Mexico why it eliminated its anti-dumping duties. Mexico can better explain its actions instead of us speculating,” said a U.S. Trade Representative spokesman.

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